By Rich Harvey, CEO & Founder, propertybuyer.com.au
Imagine you come across a slick and charismatic property investment advisor who offered to help guide you through the acquisition of a real estate asset that could help secure your future financial freedom.
Now, imagine that so-called expert billed themselves as independent and experienced… but was really just flogging you overpriced repackaged apartments or house-and-land package stock while getting a huge kickback from the developer for doing so?
Or, picture that merchant of sound advice being a front for a company that buys poor quality property or distressed mortgagee listings in bulk and sells them on for a huge margin?
It sounds horrifying – the sort of thing that would’ve been stamped out in the bad old days of the 1980s and 90s. But it still happens. A lot. Salespeople who present themselves as investment experts operate on a large scale in the Australian real estate space.
They’re very good at disguising themselves as arbiters of success and can be hard to spot. And the best interests of buyers are the last thing on their minds.
How do you tell the champions from the charlatans? How can you be sure that a property advisor you’re considering working with is experienced, trustworthy and good at their job?
Treat it like a first date
If you’re happily partnered, cast your mind back to when you were single and out on the dating scene trying to distinguish between solid potential matches and duds.
After a while, you probably got quite good at asking the right questions to get a sense of whether someone was worth your time. No doubt you also learned how to spot red flags and the importance of not ignoring them.
You try to get a sense of what kind of person you’re sitting across from. What makes them tick? What are their motivations? What’s their past?
Treat your potential property advisor like a possible mate. Ask them lots of questions about their background, their way of doing business, their track record and why they do what they do.
One of the most important questions you should ask first up is: “How are you paid?”
Generally speaking, if an ‘independent’ property advisor is being paid by anyone other than you, they’re not independent. Someone else is bankrolling their advice to you and you therefore can’t be entirely sure that it’s the best information.
Nothing is truly free, and this is especially true when it comes to investment decisions. Invest your money in an expert who is qualified, experienced and truly independent.
Another crucial question is: “What do you actually do?”
A lot of people call themselves property advisors but could be any number of things. As I mentioned, they could be more akin to a marketeer who’s engaged by a developer to sell stock in their projects. They could be an education provider who’s better at teaching than doing, which is fine.
Or they could be a buyer’s agent – like me – who works exclusively for clients to seek out the best property in the best area and for the best price to help achieve their goals, then negotiates its purchase on their behalf.
You’d expect me to say it, but I firmly believe a buyer’s agent is the better bet when it comes to choosing a property advisor to work with. Selecting a top notch one is crucial – I’ve written a guide to finding the best buyer’s agent for you here.
See where they’ve been
In the dating scene, no one is perfect. Past failed relationships and a divorce – or two – aren’t uncommon or even necessarily a red flag.
But in the property investment arena, treat experience as a main priority. Baggage might be fine in love, but not so in real estate.
Explore the experience of a potential property advisor in great detail. How long have they been in the industry? Where did they start out? What’s been the progression of their career?
Ask how many deals they’ve overseen and what the long-term results of those transactions have looked like. What kind of buyers do they work with? What are the most common goals they help to achieve?
Ask for references or testimonials – but don’t take them at face value. Check to see that any endorsements are legitimate and based on real-life scenarios.
Press them on the reach and quality of their professional networks. Do they work with a lot of real estate agents to source off-market deals? Are they linked with any other professionals who compliment the buying journey for you, while also showing that they’re respected among their peers?
Try to get a sense of what runs they have on the board. See if they have a specific area of expertise or broad experience with a number of buyers, areas and property types. If you’re young and looking at a long-term strategy, someone who works exclusively with older clients on retirement planning and real estate that suits them might not be ideal.
Do some cyber stalking
For those who’ve dated in the modern era, you’ll be familiar with the art of cyber sleuthing.
When you’re courting a property advisor, make use of the digital tools at your disposal to get a sense of who you’re thinking of dealing with.
Check that they’re properly licensed in the state where they operate. Check if they have any complaints or judgements against their name with the relevant authorities. Pore over review websites and real estate forums to see what others who’ve come across them thought.
Stalk LinkedIn. Check their other social platforms to see if they share updates about their work and the people they associate with.
See if they’ve written or spoken about their chosen field at functions, conferences, in industry press and on blogs. What does their web presence look like? Do they seem established and seasoned? Are they members of or connected to any industry associations or bodies, like the Property Investment Professionals of Australia?
Someone who is experienced will have a big footprint that showcases their worth. Someone with little-to-no presence is probably flying under the radar for a reason.
Finding a trustworthy advisor takes time, but it’s worth the effort to ensure you are relying on the right advice for this most important buying decision.
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